Not at Home on the Range: Subsidized Fracking Hits Colorado

August 20, 2014 | Article by Paul Thacker, on assignment with Oil Change International

Duke Cox, Grand Valley Citizens Alliance

A general contractor in Colorado’s Grand Valley, Duke Cox says the first time he became aware that drilling for gas might be a problem was back in the early 2000s when he happened to attend a local public hearing on oil and gas development. A woman who came to testify began sobbing as she talked about the gas rigs that were making the air around her home impossible to breathe.

“There were 17 rigs in the area, at that time,” Cox says. “And they were across the valley, so I wasn’t affected. But she was my neighbor.” The incident led Cox to join the Grand Valley Citizens Alliance, a group of activists concerned about drilling policies in his area on Colorado’s Western Slope. Within months he became the group’s President and public face. And as fracking for gas became more common across the state, he has found more and more of his time taken up with the cause.

“We are ground zero for natural gas and fracking in this country,” he says.

In response to public unease, the state has created a system to report complaints of oil and gas health effects. The subject has become so acute that it consumes Colorado’s politicians and electorate, who have been squaring off on multiple ballot initiatives to limit where companies can drill, in order to provide a buffer between gas wells and people’s homes.

But there’s one fact the industry would like to hide from the public (but uses in its lobbying of Congress): much of the drilling activity in Colorado would never happen were it not for generous tax subsidies.

Four years ago, the American Petroleum Institute concluded that gas development would fall dramatically in the Rocky Mountain region without certain tax breaks to make development economically viable. While precise figures for subsidies specific to Colorado are difficult to derive, a recent report by Oil Change International shows that subsidies to the fossil fuel industry continue to grow in value as the fracking boom has hit its stride.

At the national level, the report shows over $21 billion in federal and state subsidies that taxpayers provided to the fossil fuel industry in 2013. The use and value of these subsidies have increased dramatically in recent years—a product of the “all of the above” energy policy.

“They are profitable because of tax breaks,” says Cox.

SCIENTIFIC ALARM

Studies published in leading scientific journals continue to document the potential harm to people living close to gas wells. In 2012, a Colorado nonprofit called The Endocrine Disruption Exchange published the results of gas well air samples tested for chemicals. The study found several hydrocarbons at levels known to affect the endocrine system and lower the IQ scores of children exposed while they were fetuses.

Last February, researchers with the Colorado School of Public Health and Brown University released a study that discovered that children born close to gas wells had a 30 percent greater chance of congenital heart defects and a higher incidence of neural tube defects. The study was met with criticism from Colorado’s Chief Medical Officer…a perhaps unsurprising reaction from a state official appointed by a governor with well documented strong ties to the oil and gas industry. The criticism follows a pattern of reactions from government officials throughout the country, pushing back against a growing mountain of evidence of fracking’s ill effects.

Lisa McKenzie, a Research Associate at the Colorado School of Public Health and one of the Colorado study’s authors, acknowledges the study’s limitations and uncertainties. “We would like to go back and get a look at the type of exposures these women had during the first trimester of pregnancy,” she says. Unfortunately, she has not been able to expand on her publicly-funded research, thus far.

Chuck Davis, a political scientist at Colorado State University, compares attempts by the fossil fuel industry and industry allies to highlight scientific uncertainty to similar strategies tobacco companies undertook in order to underplay health risks. In both tobacco and the oil and gas industry’s cases, the presence of some form of “doubt” around the science of the impacts of their industries (whether real or contrived) helps the industry continue practices that experts believe to be harmful.

In another example of this strategy, the Colorado public health office again highlighted scientific uncertainties after officials at Valley View Hospital in Garfield County reported an increase in anomalies in fetuses carried by women living close to gas wells. After state investigators found no common cause to explain the fetal anomalies, Wolk seemed to dismiss legitimate concerns by local public health officials. “People have to be careful about making assumptions,” Wolk told the Denver Post.

Meanwhile, residents of Colorado continue to see new health impacts, and fracking continues at pace in their communities. Many of these residents don’t see the uncertainty state officials continue to push.

PERSONAL IMPACT

When a New York Times reporter went to Garfield County three years ago, the paper published a video on residents complaining of air problems caused by natural gas rigs. “We’re gonna pack up. We’re leaving,” said Floyd Green, a welder who had lived in the County for the past three years. “We’re moving back East, and we’re having to start completely over.”

Green detailed several symptoms his family experienced, forcing them to leave the area. “We constantly smell the fumes from the condensate tanks which cause headaches, sometimes nausea. Diarrhea, nosebleeds, muscle spasms.”

A link to the video can be found at Frack Free Colorado, which has a webpage devoted to “Colorado’s Affected People.” Green is just one of many people who allege problems from natural gas including Susan Wallace Babbs, of Parachute and Karen Trulove of Silt. While these individuals were once actively speaking out about the dangers of fracking, their voices have fallen silent. Phone numbers have become disconnected and addresses no longer current.

“They sign nondisclosure forms or move away,” says Tara Meixsell, who lives on a ranch outside New Castle. “Very few win lawsuits. Some sign gag orders, but more just move away, lose everything, and marriages crumble.”

Meixsell was featured in the documentary “Split Estate” and she wrote Collateral Damage, a book that chronicles the lives of those affected by gas development.

She became involved around 8 years ago, she says, after she drove out to a nearby ranch to buy hay that was selling for about half of market price. When she got there, the reason for the discount quickly became clear. The owners were two professionals who had bought a ranch to raise cows, but they soon found their land surrounded by gas rigs, making it impossible for them to breathe the air. After fighting for a year, Meixsell says they were told by their lawyer to give up and move away.

“They were leaving the ranch and didn’t need the hay,” says Meixsell. And it’s not the first time she’s witnessed such events. “When I hear these ranchers come to the state house and testify, ‘My husband and I bought 20 acres and it’s our dream home.’ It’s like a broken record to the politicians because they’ve heard it all before.”

Cox agrees, adding that many of the people he met after first becoming aware of the problem have signed nondisclosure agreements with companies or moved away. In fact, he moved from his former house to an area with little gas development, but the companies are now moving in. “It’s the same old, same old,” he says.

FUNDING A DANGEROUS ENVIRONMENTAL EXPERIMENT

When Meixsell talks about how bad gas development has been to the health of people in Colorado, she does not mince words. “We’re guinea pigs,” she says.

But this experiment of exposing people to toxics released by natural gas development would not occur without billions in subsidies from the federal and state governments. In a recent report, Oil Change International has found that federal subsidies for production and exploration for fossil fuel subsidies have grown by 45 percent, from $12.7 billion to a current total of $18.5 billion. Much of the increase comes from intensified production.

“At a time when scientists are telling us that oil and gas production is unsafe for our communities and also our climate as a whole, it’s simply irrational to continue pumping billions of taxpayer dollars to this industry via increased subsidies,” says David Turnbull, Campaigns Director of Oil Change International. “Despite dire warnings from academics and communities sounding the alarm, these subsidies somehow continue today.”

The White House has estimated that the subsidy for accelerated depreciation of natural gas distribution pipelines was $110 million in 2013. This subsidy allows companies to deduct higher levels of pipeline depreciation costs upfront, providing a financial benefit to the companies….or, as the American Gas Association itself puts it, depreciation helps “encourage the expansion and revitalization of the natural gas utility infrastructure.” Colorado also kicks in financial support. The state currently supplies additional gas production subsidies in the form of sales tax exemptions, allowing industry to escape Colorado’s 2.9% sales tax.

“The rest of the country doesn’t get it,” says Cox. “[Natural gas] is not a clean fuel. But the word is getting out, and they are starting to lose the fight.”

Comments (6)

I live in the Raton Basin of southern Colorado, an area that has seen intensive development of coal bed methane (CBM) over the last decade. I think it is safe to say that the people of Colorado (and I suspect other states are no different) are subsidizing this industry in other ways as well. For example, while companies have to pay us something for the right to use the surface of our properties to access their mineral rights, the amount is largely up to them and comes nowhere near enough to compensate for the resulting loss in property value. In many instances, properties become entirely unsellable. Drilling and fracking rigs and industrial engines running 24/7 is generally not part of people’s visions for living in rural Colorado. A lot of people in this area have simply abandoned their properties and moved away. They are still technically on the market, but no one is buying even at fire sale prices. Similarly, the industry is pumping out over 16,000 acre feet of “produced water” each year from this basin. Studies have concluded that this massive scale groundwater pumping will result in stream depletions. As tested in the Vance case, produced water is ground water – water the industry has no right to. How can the state allow this to go on? Our properties, our water and our future is being sold out to the gas industry at a bargain price. If not for these giveaways, the industry would not be profitable.

My sister lives on 40 acres just east of Douglas, WY. Two years ago her well water was fine. There are now fracking rigs all around the area. Her water smells like gas and is undrinkable. This summer the oil company laid a pipeline along her east fence line. We doubt her water well will ever produce potable water again. It’ a crime what the fracking does to the water. The oil companies are fracking just as fast as they can before the pubic can stop them.. The state governments have sold out to the lobbyists a has the Fed. Government.